Calculators

457 Savings Calculator

A 457 can be one of your best tools for creating a secure retirement.
It provides you with two important advantages. First, all contributions
and earnings to your 457 are tax-deferred. You only pay taxes on
contributions and earnings when the money is withdrawn. Second, many
employers provide matching contributions to your 457 account which can
range from 0% to 100% of your contributions. The combined result is a
retirement savings plan you can not afford to pass up.

Definitions

Annual salary

This is your annual salary from your employer before taxes and other benefit
deductions. Since your contribution and company match are based on the salary
paid to you by your employer, do not include any income you may receive from
sources other than your employer.

Percent to contribute

This is the percentage of your annual salary you contribute to your 457 plan
each year. This calculator limits your contribution to 50% of your salary.

Annual contribution limits

Your total contribution for one year is based on your annual salary times the
percent you contribute. However, your annual contribution is also subject to
certain maximum total contributions per year. The annual maximum for 2010
remains at $16,500. If you are age 50 or over, a "catch-up" provision allows
you to contribute an additional $5,500 into your 457 account. It is also
important to note that employer contributions do not affect an employee's
maximum annual contribution limit.

Current age

Your current age.

Age of retirement

Age you wish to retire. This calculator assumes that the year you retire you
do not make any contributions to your 457. So if you retire at age 65, your
last contribution happened when you were actually 64.

Current 457 balance

The starting balance or current amount you have invested or saved in your 457.

Annual rate of return

The annual rate of return for your 457 account. This calculator assumes that
your return is compounded annually and your deposits are made monthly. The
actual rate of return is largely dependent on the type of investments you
select. For example, from December 1999 to December 2009, the average annual
compounded rate of return for the S&P 500 was -0.6%, including reinvestment
of dividends. From January 1970 to December 2009, the average annual compounded
rate of return for the S&P 500, including reinvestment of dividends, was
approximately 10.1% (source: www.standardandpoors.com). Since 1970, the highest
12-month return was 61% (June 1982 through June 1983). The lowest 12-month
return was -43% (March 2008 to March 2009). Savings accounts at a bank may pay
as little as 1% or less but carry significantly lower risk of loss of principal
balances.

It is important to remember that these scenarios are hypothetical and that
future rates of return can't be predicted with certainty and that investments
that pay higher rates of return are generally subject to higher risk and
volatility. The actual rate of return on investments can vary widely over
time, especially for long-term investments. This includes the potential loss
of principal on your investment. It is not possible to invest directly in an
index and the compounded rate of return noted above does not reflect sales
charges and other fees that funds and/or investment companies may charge.

Employer match

An employer match is in addition to your annual contributions. It is based on a
percentage of your annual contributions. This range can be anywhere from 0% to 100%.

For example, let's assume the employer matches 50% of the employee's contributions
up to 6% of their salary. The employee earns $100,000 per year and contributes 10%.
The results would be:

$10,000 from the employee

$3,000 from the employer (which is 50% of $6,000 or 6% of the annual salary)

Total: $13,000

Please read the definition for "Employer maximum" for a detailed description of
maximum employer matching contributions. It is important to note employer
contributions do not affect the maximum annual deferral allowed to an employee.
(The employee contribution plus any employer match cannot exceed the maximum allowed
deferral.)

Employer maximum

This is the maximum percent of your salary matched by your employer regardless of
the amount you decide to contribute. For example, let's assume your employer has
a 50% match, up to a maximum of 6% of your annual salary. If you have an annual
salary of $25,000 and contribute 6%, your annual contribution is $1,500. With a 50%
match, your employer will add another $750 to your 457 account. If you increase
your contribution to 10%, your annual contribution is $2,500 per year. Your employer
match, however, is limited to the first 6% of your salary and remains at $750.

Information and interactive calculators are made available to you as self-help tools
for your personal independent use and are not intended to provide investment advice.
We can not and do not guarantee their applicability or accuracy in regards to your
individual circumstances. All examples are hypothetical and are for illustrative purposes.
We encourage you to seek personalized advice from qualified professionals regarding all
personal finance issues.